Causation and Case-Within-the-Case Developments in 2010

Case-Within-the-Case Method in Practice
In Suder v. Whiteford, Taylor & Preston, LLP, 992 A.2d 413 (Md. 2010), a former client brought a legal malpractice action against a law firm, alleging that the firm negligently failed to timely request an extension of her deadline to renounce her deceased husband’s will. The client originally filed for an extension of time one day before the deadline expired, and the court granted this extension six days after the deadline had expired. After filing another extension, the client hired the law firm, which proceeded to successfully file extensions on her behalf until the firm allowed the fourth extension to expire. When the client appealed the denial of that extension, the client’s son intervened, asserting that the court properly denied the client her fifth extension, as the application for this extension was untimely. The court agreed, finding that the court did not have discretion to enlarge the time period for extension applications. Id. at 415–17.

The firm admitted that they breached their duty by failing to timely file the extension, but argued that this breach did not proximately cause the client’s damages. The client argued that the trial-within-a-trial method of establishing proximate cause did not apply to the current case, as the parties had already litigated the underlying case, with the court finding that the widow was not entitled to an extension of time. The court, however, disagreed, stating that courts employ the trial-within-a-trial method whenever a proximate cause dispute exists, and explained that the purpose of this doctrine is to determine what would have occurred had the attorney not been negligent. In this case, the trial-within-the-trial should determine what would have happened if the firm had timely filed the fifth extension. Id. at 415, 420–21.

In the trial-within-the-trial, the law firm challenged the validity of the first extension, even though the son did not assert this claim in the underlying suit. The client argued that the law firm could only raise arguments in the trial-within-the-trial that were actually raised by the intervening son in the underlying litigation. Otherwise, the client asserted, such arguments would constitute a collateral attack on the underlying judgment. Id. at 421–22. The court disagreed, explaining that the underlying judgment itself cannot be attacked by the new argument, but that the firm could possibly employ the new argument as “the knife that severs the causal link between its own negligence and [the client’s] damages in this malpractice action.” Id. (emphasis in original). Thus, the firm was not limited by the defenses the son originally raised but was instead limited only by the defenses he would have raised had the malpractice not occurred. Id. at 421–22

Necessity of Experts to Establish Causation
Generally, courts require expert testimony to prove causation in legal malpractice cases when the casual link between the attorney’s alleged breach and the client’s damages is beyond a juror’s common understanding. For example, the court in Primis Corp. v. Milledge, No. 14-08-00753-CV, 2010 WL 2103936, at *3 (Tex. Ct. App. May 27, 2010),found that expert testimony was required for the plaintiff to prove causation. In that case, the client alleged that the firm’s failure to file an answer in an action seeking confirmation of an arbitration award resulted in a default judgment against the client confirming the arbitration award. The client, however, failed to produce expert testimony showing that, but for the firm’s negligence, the client would have secured a more favorable judgment.

Invoking that standard for requiring expert testimony, the court added that when a legal malpractice action concerns negligence in underlying litigation, expert testimony is generally required to determine whether the result of the litigation would have been different but for the attorney’s negligence. Moreover, even though a judge may be able to decipher the causation element in a legal malpractice case, the above standard also applies to bench trials because facts regarding causation must be established in evidence at trial and subjected to the adversarial process. As this legal malpractice action involved negligence in underlying litigation, the court held that expert testimony was required to prove causation. Because the client failed to adduce such testimony, it could not meet its burden of proving that the negligence of the firm caused the asserted damages. Id. at *3 & n.1. 

In contrast, Sheehy v. New Century Mortgage Corp., 690 F. Supp. 2d 51, 62-65 (E.D.N.Y. 2010), applied this standard to a breach of fiduciary duty case to find that no expert testimony was needed to establish that the attorney breached his duty or that this breach caused the client’s damages. In Sheehy, a former client brought breach of fiduciary duty claims against an attorney, alleging that the attorney knowingly provided false information that induced her to purchase real estate in a transaction in which the attorney had a conflict of interest. In denying the attorney’s motion for summary judgment, the court assumed arguendo that the rule regarding expert testimony in legal malpractice cases also applied to breach of fiduciary duty claims. The court found that expert testimony was not required because the fact-finder, based on ordinary experience, could judge whether or not the attorney’s breach of fiduciary duty resulted in damages to the client. Id.at 63, 65. 

Similarly, the court in Guyton v. Hunt, No. 2090063, 2010 WL 2885944, *5 (Ala. Civ. App. July 23, 2010), found that no expert testimony was required to prove the attorney’s breach of the standard of care. In Guyton, a former client alleged that an attorney committed malpractice by failing to timely notify him that his motion for a new trial had been denied. The client asserted that the untimely notification delayed his filing of an appeal. In reviewing the trial court’s summary judgment for the attorney, the court found that the delay in notification “constitutes a breach of the standard of care so apparent that expert testimony is not required for a layperson to understand that breach.” Id. at *5. Nonetheless, the court affirmed the grant of summary judgment because it found that the client could not establish that this breach actually caused his damages. The client was still able to file a timely appeal, and, moreover, the client presented no evidence that the outcome of his underlying criminal case would have been any different had the attorney timely notified him of the court’s denial of the new trial.

Court Denies Expectancy Damages and Declines Loss-of-Chance Doctrine 
In Rivers v. Moore, Myers & Garland, LLC, 236 P.3d 284 (Wyo. 2010), a former client brought a malpractice suit against a law firm, arising out of his purchase of property to be developed into a medical office building. Although the restrictive covenants of the property only provided for a 5,000-square-foot facility, the client sought to build a 10,000-square-foot building on the site. The client alleged that the firm committed malpractice by failing to adequately warn him of the property’s development restrictions and by delaying in taking action on his behalf to remove those restrictions. Specifically, the client alleged that he suffered expectancy damages—the difference between the value of the larger planned building and the smaller building actually constructed—arguing that if the firm had adequately represented him, he would have been able to build the larger building.

In affirming the trial court’s award of summary judgment for the law firm, the court found that the client could not prove that the firm’s breach of duty proximately caused the expectancy damages. First, the client argued that a material issue of fact existed regarding whether or not the original developer would have consented to the larger building because the firm did not present affidavits to the contrary. The court, however, found such affidavits unnecessary because Rule 56 permits consideration of the pleadings, with or without affidavits, on summary judgment. In examining the pleadings, the court found that the client made no allegation that but for the firm’s breach, the original developer would have agreed to the larger building. Thus, the court found that no genuine issue of material fact existed as to the lack of a causal link between the firm’s conduct and the client’s inability to construct the larger building. Id. at 291–294. 

Finally, the court refused to apply the “loss-of-chance doctrine.” Id.at 293–94. Although the court declined to address the broader question of whether or not to extend the medical malpractice doctrine to legal malpractice cases in general, the court noted that in medical malpractice cases where loss-of-chance issues arise, the parties can present to the jury hard statistics generated outside of the litigation context to show a plaintiff’s chance of survival absent the alleged medical malpractice. No comparable set of statistics exists, however, for the likelihood of a legal claim’s success absent the alleged legal malpractice. Therefore, the jury must consider each claim on a case-by-case basis by employing the case-within-a-case method, rendering the loss-of-chance “out of place in the realm of legal malpractice.”

Erin L. Delatte is an associate with Liskow & Lewis, PLC in New Orleans, Louisiana.